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The economic banishment of all things Russian. Tariffs on Chinese imports. Pandemic-caused shortages of computer chips, bicycles, garage door parts and other imports. Brexit.
Just about everywhere you turn, you can see that the tectonic plates of the global economy have stopped converging and are starting to pull apart in ways that will determine new winners and losers, says Ethan Harris, head of global economics for Bank of America Securities. "Deglobalization is a gradual process, and in the long run, very important" to investors, he says, because it will have profound impacts on corporate profitability.
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Globalization refers to the increase of commerce across borders. U.S. companies prospered for decades as new markets opened for their goods and labor costs plummeted thanks to overseas production. Strategists at BofA have estimated that over the past 20 years, globalization has contributed more than half of what has been a robust expansion in profit margins. Globalization has also helped to deliver low-cost goods to American consumers.
But now, says market strategist Ed Yardeni, the pandemic and spreading political and military conflicts have stretched supply chains past the breaking point, prompting companies to bring many operations closer to home. "Deglobalization was almost inevitable," Yardeni says. U.S. companies are starting to "reshore" production back to the U.S., "near-shore" it to neighbors such as Mexico, or "friend-shore" it to allies such as Vietnam.
Investment firm Piper Sandler counted more than 900 announcements of companies either building or expanding manufacturing facilities in the U.S. in the 12 months ending in May of 2022. In 2012, there were only about 100 such announcements. Over the long term, companies
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TODAY Derek From is a successful lawyer in Canada. Twelve years ago, he was roughing it in Arizona, trying to break into the recording industry. So he started selling his blood plasma. Twice a week, he sat for an hour in a Grifols Biomat centre, as an apheresis machine whirled, siphoning the plasma out of his blood. For this, he took home $45. "As a poor person" at the time, he found that "a huge economic benefit".
It was also part of a thriving industry. Blood products made up a remarkable 1.6% of American exports in 2016. Since 2005 blood-plasma collections have nearly quadrupled. To critics, this is evidence of a rapacious industry coercing the poor to auction bits of themselves to make ends meet. In fact, plasma, 90% of which is water, is quickly replenished. Giving it has no obvious negative health effects—though the long-term consequences of repeated siphoning have not been fully studied. Strict testing (and later heat-treating) of the extracted plasma ensures that those with communicable...Continue reading
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